Preparing a multi-country, sub-national CGE model: EuroTERM including Ukraine

Glyn Wittwer

No 333470, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: The TERM (The Enormous Regional Model) methodology has been applied to many countries over the past two decades to model sub-national regional impacts of policy scenarios. The methodology does not rely on sub-national regional input-output tables. Instead, estimates of regional activity shares are used to split a national CGE database into regions. Activity shares are based on industry by region employment numbers extracted from census data, regional agricultural and mining activity data and international trade data by port. EuroTERM provides an example of extending the TERM methodology. First, the GTAP master database is aggregated for non-European nations while keeping 31 European nations plus Russia, Ukraine and Moldova (proxied by Rest of Eastern Europe) represented separately. The database is reconfigured to 34 individual CGE databases. Using NUTS2 data based on similar raw data as TERM, regional shares are estimated. Eurostats is the main source of these data. Regional shares provide the basis for splitting 24 European CGE databases to the NUTS-2 level. The other 10 nations remain as single regions. Industry cost structures or technologies are based on GTAP data for each nation. This approach differs from single-nation TERM, in which a single industry technology applies to each region. The methodology used to estimate inter-regional trades in TERM has been modified to accommodate matrices of known international trades from GTAP, while splitting origins and destinations into sub-national regions. Port activity data also contribute to estimation of sub-national trade matrices. Electricity Global data on power plants by location have contributed to a split of electricity into 9 generating sectors plus distribution. The war in Ukraine has provided motivation for adding Ukraine, represented by 24 oblasts plus Kyiv city. The EuroTERM master database at present includes 74 sectors in 322 regions.

Keywords: Environmental Economics and Policy; International Relations/Trade (search for similar items in EconPapers)
Pages: 35
Date: 2022
New Economics Papers: this item is included in nep-cis, nep-des, nep-ene, nep-env, nep-int and nep-tra
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Citations: View citations in EconPapers (1)

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Working Paper: Preparing a multi-country, sub-national CGE model: EuroTERM including Ukraine (2022)
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